Friday, April 3, 2009

Legislative incompetence

The Nation (!) reports on truly astounding incompetence on the part of Congress in the writing of the tax provisions for alternative fuel use in the 2005 transportation bill. The result is distortions in the paper market and pointless, non-trivial transfers to some large paper companies.

The Nation, of course, blames not the legislature, but rather the companies:
Whether or not Congress gets around to turning off the spigot, the episode is a useful reminder of the persistently ingenious ways the private sector can exploit even well-intentioned legislation.
It is also a reminder that it is useful to think hard about legislation before passing it. The companies job is to maximize profits within the law, not to cut the legislature a break when it does something stupid.

And how come it has taken this long to fix? Yikes.

Hat tip: marginal revolution